J.P. Morgan and the State of Banks

J.P. Morgan reported a profit surge, with some caveats. What does the struggles of J.P. Morgan suggested about the banking industry at large? Brett Philbin joins MoneyBeat.

This transcript has been automatically generated and may not be 100% accurate.

... ay ay mm mm ... the more this morning reporting earnings of four dollars will ... kick off earnings season for the banks to report a little early ... JPMorgan's bottom line look pretty good earnings of thirty one percent By ... with a high quality or from a low quality number looking to sit in at billion ... as a good number but what got into that sits in at billion for Philbin who covers the banks with Dow Jones and in general if you talk about it ... look they they could sit in at billion dollars I mean this is not a lot of money ... but is a gigantic bank on the stock isn't moving a lot our investors really happy ... with this quarter's numbers ... we had a civil war going on right now the market the stock is down investors look at the company and they say ... hey you know we have the GSEs mortgage refinancing boom that these can be a kind of on its way down now ... rates going up he had the best of banking did pretty well this quarter which also had the bank set aside less money for their loans in that money was cut in boosting profits this quarter see really had ... he had this kind of fake fake earnings that are right we believe it's an accounting measure really ready to comes down to ... take a cut that who knows one in a billion write for the provision for fifty cents so you take that out and earnings were flat with the year-ago he can spin these numbers neatly wine ... by the look JPMorgan they have they have a lot of different businesses rates or the investment banking team ... did me well can cut off set any probs of the consumer business ... but the consumer business but the more intrigued by boom boom lip color right the threat slowing down the economy is still clear it is ... it seems that there are two and Jamie Dynan was kind of optimistic great ... but what have you ... when you look JPMorgan numbers the number of what what could be headed to new budget numbers what do you take have you extrapolate that to the rest of the banks um I mean you have like best they can have more its ailing Coleman Wright have ran with trading yet she was very volatile here for a good month in May to prevent this may suggest that reading is better than we thought ... the guys though I mean I think the same problems are still no apparent that the housing with the status of recovery is very skittish here you have but this refinancing boom which says it is kind of wavering so I feel like ... the group is Khona weensy approach for another chilling out much ... because I saw someone calls the boring boring quarter it cut of ... shipping out the lady so far Daniel I know ... on rates ... which are going up we know that we fall the ten year yield hawks here so we we know that he is going up for small the rate of ... that is going to have an effect on the decks for a ... gain of the Fed this quarter ... but it will as we move on yet it really depends I mean if if a Morgans that results that are more skewed towards the shorter term rates so that weight in the long ones going up the stock to hurt the Bismarck vision of other firms out there that you need to know will benefit as much he has but it's the sky ... to that of the conformity with the Fed as to ... how hurt spanking to really difficult challenge Jeremy thanks for while have wanted these rates you know the net interest margins of the herd righty and ... going up a health but also hurts in the same time ... right because on one hand the rates going up they can ... do there's this red on online in causal Weidmann that's better for them ... but if it slows down the economy if he reduces ... his cuts into the housing market the reduces mortgages ... down ... on the JPMorgan in the of the business is gone said that some these other banks don't think any really speaks to how can you talk about big banks and the benefits are there but you wanna be diversified because things like this we have that talk about Glass Steagall and one separate but he had been said that he can really help you be saw this quarter with the trading as such but ... St high and ... it's a very simple business and we had dinner European debt crisis happened because all kinds of market events happen the economy that business you not as possible the once wanted sell ... yet to be diversified but the same time the mean you have all kinds of headwinds out there right and this it was good for me for quite awhile think ... Brett Philbin think very much appreciated